On 10/03/2019, the Government issued Decree 39/2019/ND-CP on the organization and operation of the Small and Medium Enterprise Development Fund on 10/03/2019. This Decree takes effect from 01/07/2019.
According to Decree No. 39/2019/ND-CP, the Small and Medium Enterprise Development Fund is a non-budgetary state financial fund, operating for non-profit purposes, established by the Prime Minister, and operated by the Fund. According to the model of one member limited liability company holding 100% charter capital by the State, with a minimum capital of VND 2,000 billion (hereinafter referred to as “Fund”).
The Fund performs the following functions: Lending, sponsoring small and medium enterprises (hereinafter referred to as “SMEs”), starting a creative business, SMEs participating in industry linkages, value chains and receiving and managing resources. loans, grants, aid, contributions and entrustments from organizations and individuals to support small and medium enterprises
The Fund provides loans in two forms: Direct lending is the direct lending fund for innovative start-up SMEs, SMEs participating in industry-linked clusters, value chains that need loans and Indirect loans are The Fund provides loans to small and medium-sized enterprises through the allocation of capital to commercial banks.
In terms of loan conditions, Article 16 stipulates that SMEs start their businesses, SMEs join industry-linked clusters, value chains must have feasible production and business projects and plans; ensure minimum equity capital of 20% of the total investment capital of the project; meet the requirements of loan security in accordance with the law. Article 17 stipulates that the direct lending interest rate of the Fund shall be equal to 80% of the lowest level of commercial lending interest rates; the lowest level of commercial lending interest rates shall be determined on the basis of comparing the lending interest rates of 04 banks. Commercial goods with state capital and the largest total assets at the time of determination of the lending interest rate of the Fund. The maximum loan amount for each project or production or business plan must not exceed 80% of the total investment capital of each project or plan. The total loan amount of a Fund for an SME shall not exceed 15% of the Fund’s actual charter capital, the maximum term of loan shall not exceed 07 years (Article 18).
Decree No. 39/201 /ND-CP provides detailed provisions for Article 20 of the SME Support Law, on organizational structure, functions and tasks and modes of operation of the SME Development Fund. The Fund focuses on supporting innovative start-up SMEs and SMEs to join industry and value chain clusters. For funds received, sponsored, donated, contributed, entrusted by domestic and foreign organizations and individuals, the Fund will support SMEs to meet the conditions of the donor and in accordance with the law. Vietnam law.